Ibuse was born in 1898 to a landowning family in the village of Kamo which is now part of Fukuyama, Hiroshima. At the age of 19 he started studying at Waseda University in Tokyo. He was at first interested in studying poetry and painting but was encouraged to study fiction and ended up specialising in French literature. He was harassed sexually by a gay professor named Noburu Katagami, so he had to leave the university before graduation, but began publishing stories in the early 1920s. He began to be recognised in the late 20's when his work was favorably mentioned by some of Japan's top critics. He appeared on the literary scene with the publication of Salamander in 1929, and thereafter continued to write in a style characterized by a unique blend of humour and bitterness. He was awarded the Naoki Prize for John Manjirou, the Cast-Away; his Life and Adventure and continued to publish works filled with warmth and kindliness, while at the same time showing his keen power of observation. The themes he employed were usually intellectual fantasies that used animal allegories, historical fiction, and the country life. During World War II he worked for the government as a propaganda writer.

Ibuse was known and appreciated for most of his career, although it wasn't until after the war that he became famous. In 1966 he published his most well known work: Kuroi Ame ("Black Rain") which won him international acclaim and several awards including the Noma Prize and The Order of Cultural Merit, the highest honor that can be bestowed upon a Japanese author. The novel draws its material from the bombing of Hiroshima with the title referring to the nuclear fallout. Ibuse was not present at the time of the bombing, but uses the diaries of survivors to construct his narrative. His earlier story Kakitsubata (“The Crazy Iris”, first published in 1951) deals with similar themes.